Federal Register: March 28, 2002 (Volume 67, Number 60)[Rules and Regulations
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DEPARTMENT OF ENERGY
48 CFR Parts 904, 952, and 970
RIN 1991-AB42
Acquisition Regulation: Security Amendments to Implement
Executive Order 12829, National Industrial Security Program
AGENCY: Department of Energy (DOE).
ACTION: Interim final rule.
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SUMMARY: The Department of Energy (DOE) is amending the Department of
Energy Acquisition Regulation (DEAR) to implement Executive Order
12829, National Industrial Security Program, dated January 6, 1993, and
Section 828 of the National Defense Authorization Act for Fiscal Year
1997, and to bring the DEAR into conformance with existing practices.
DOE is making these changes to its security system to ensure a uniform
and simplified security system for contractors and others requiring
access authorization for classified national security or restricted
atomic energy information. The changes also include a provision to
allow the Secretary of Energy to waive the prohibition on award of a
national security contract to an entity controlled by a foreign
government if an environmental restoration requirement is involved.
EFFECTIVE DATE: This interim final rule will be effective May 28, 2002.
Comment date: Comments should be submitted on or before April 29,
2002.
ADDRESSES: Mail comments to Richard Langston, Office of Procurement and
Assistance Policy (MA-51), U.S. Department of Energy, 1000 Independence
Ave. SW., Washington, DC 20585.
Submit electronic comments to [email protected]
FOR FURTHER INFORMATION CONTACT: Richard B. Langston, Office of
Procurement and Assistance Policy (MA-51), 202-586-8247 or by
electronic mail addressed as above.
SUPPLEMENTARY INFORMATION:
I. Background
II. Explanation of Revisions
III. Procedural Requirements
A. Review Under Executive Order 12866.
B. Review Under Executive Order 12988.
C. Review Under the Regulatory Flexibility Act.
D. Review Under the Paperwork Reduction Act.
E. Review Under the National Environmental Policy Act.
F. Review Under Executive Order 13132.
G. Review Under the Unfunded Mandates Reform Act of 1995.
H. Review Under the Treasury and General Government
Appropriations Act, 1999.
I. Review Under the Small Business Regulatory Enforcement
Fairness Act of 1996.
J. Review Under Executive Order 13211.
I. Background
Executive Order 12829, National Industrial Security Program
(January 6, 1993), requires a uniform system for classifying,
safeguarding, and declassifying national security information. DOE is
making these changes to its security system to ensure a uniform and
simplified security system for contractors and others requiring access
authorization for classified national security or restricted atomic
energy information. The Federal agencies are adopting the National
Industrial Security Program (NISP) as the uniform Federal industrial
security program within the limitations of their separate statutory
requirements. Among the more significant features of the new rule is
the use of a Standard Form 328, Certificate Pertaining to Foreign
Interests, to gather information relative to foreign ownership, control
or influence. Previously, DOE used a separate questionnaire of its own
with more and somewhat different questions. Now all agencies will
collect the same information. This feature will result in the greatest
savings for both contractors and Federal agencies because agencies
[[Page 14874]]
will accept each others' clearances on a reciprocal basis, in most
circumstances. A DOE clearance was not previously valid for a
Department of Defense (DOD) contract and vice versa. In most instances,
a contractor interested in seeking a contract requiring a DOE clearance
will already have either a DOD or a DOE clearance, and there will be no
need to submit the detailed information required to establish a
Facility Clearance.
Section 2536(a) of 10 U.S.C. prohibits award of a DOD or DOE
contract under a national security program to an entity controlled by a
foreign government if it is necessary for that entity to be given
access to a proscribed category of information to perform the contract.
The cognizant Secretary is authorized to waive this prohibition if the
Secretary determines that a waiver is essential to the national
security interests of the United States. That prohibition is
implemented by Subpart 904.7100 of the Department of Energy Acquisition
Regulation (DEAR).
Section 2536(b)(1)(B) of 10 U.S.C. provides separate waiver
authority for a contract for environmental restoration, remediation, or
waste management at a DOD or DOE facility. For such a contract, the
prohibition on award of a contract under a national security program to
an entity controlled by a foreign government which requires access to a
proscribed category of information to perform the contract may be
waived only if the Secretary concerned determines that (1) a waiver
will advance the environmental restoration, remediation, or waste
management objectives of the cognizant Department, (2) a waiver will
not harm the national security interests of the United States, and (3)
the entity to which the contract is to be awarded is controlled by a
foreign government with which the cognizant Secretary has authority to
exchange Restricted Data under section 144.c. of the Atomic Energy Act
of 1954 (42 U.S.C. 2164(c)). Section 904.7102 of the DEAR is being
revised to reflect this waiver authority.
In order to implement 10 U.S.C. 2536 and the National Industrial
Security Program in a timely manner, the Department previously issued
interim guidance to its personnel in two Acquisition Letters.
Acquisition Letter 97-03 was issued February 4, 1997 to implement the
requirements of 10 U.S.C. 2536. Acquisition Letter 99-03 was issued
April 2, 1999 to implement the National Industrial Security Program.
These issuances will be cancelled upon the effective date of this rule.
II. Explanation of Revisions
We have made the following changes to the DEAR:
1. Restated the authority citation.
2. Added definitions of "Access Authorization" and "Facility
Clearance," revised the definitions of "Classified Information" and
"Restricted Data," and updated the Executive Order reference at
904.401;
3. Added the word "industrial" between "DOE" and "security"
to reflect the uniform nature of the DOD and DOE industrial security
programs, added references to the applicable Executive Orders, and
substituted the words "Restricted Data" for the words "national
security information" in the reference to 10 CFR part 1045 at 904.402;
4. At 904.404, the title is changed from "Contract clause" to
"Solicitation provision and contract clause," revisions are made in
paragraphs (d)(1) and (d)(2), and a new paragraph (d)(5) is added;
5. Changed the title of Subpart 904.70 "Foreign Ownership, Control
or Influence Over Contractors" to "Facility Clearance";
6. Revised the text of 904.7000 to substitute terminology better
suited to the National Industrial Security Program;
7. Added a definition for "Facility Clearance" at 904.7002;
8. Revised 904.7003 by making minor wording changes at paragraphs
(a) and (b) for brevity and clarity;
9. Removed 904.7005, Solicitation provision and contract clause;
10. Removed the words "a company owned by" which precede the
words "an entity controlled by a foreign government" and changed
"company" to "entity" following the words "for that" in 904.7100,
Scope of Subpart.
11. Added an additional waiver authority for projects involving
environmental restoration, remediation or waste management at a DOE
site from the prohibition for the national security program on
contracting with foreign government controlled entities in 904.7102;
12. Revised 904.7103, Solicitation provision and contract clause,
by removing the words "with its Alternate I" at the end of paragraph
(a) and changing the citation "952.204-74" to read "952.204-2" at
the end of paragraph (b).
13. Revised the Security clause at 952.204-2 by removing the
existing paragraph (j) and adding a new paragraph (j), Foreign
Ownership Control and Influence;
14. Replaced the current "Foreign Ownership, Control or Influence
Over Contractor" with a new provision entitled "Facility Clearance"
at 952.204-73;
15. Removed the clause "Foreign Ownership, Control or Influence
Over Contractor" at 952.204-74;
16. Restated the authority citation for Part 970.
17. Revised 970.0404-1, Definitions, to add definitions for
"Access Authorization" and "Facility Clearance" and to revise the
definition of Restricted Data;
18. Revised 970.0404-2, General, to substitute a revised paragraph
(a), delete paragraphs (b) through (d) and to redesignate the existing
paragraph (e) as paragraph (b);
19. Revised 970.0404-3, Responsibilities of contracting officers,
to delete paragraph (a) which is inconsistent with National Industrial
Security Program procedures. Paragraphs (b) and (c) will be retained
but will be designated paragraphs (a) and (b).
III. Procedural Requirements
A. Review Under Executive Order 12866
Today's regulatory action has been determined not to be a
"significant regulatory action" under Executive Order 12866,
"Regulatory Planning and Review" (58 FR 51735, October 4, 1993).
Accordingly, this rule is not subject to review under that Executive
Order by the Office of Information and Regulatory Affairs of the Office
of Management and Budget (OMB).
B. Review Under Executive Order 12988
With respect to the review of existing regulations and the
promulgation of new regulations, section 3(a) of Executive Order 12988,
"Civil Justice Reform," 61 FR 4729 (February 7, 1996), imposes on
Executive agencies the general duty to adhere to the following
requirements: (1) Eliminate drafting errors and ambiguity; (2) write
regulations to minimize litigation; and (3) provide a clear legal
standard for affected conduct rather than a general standard and
promote simplification and burden reduction. With regard to the review
required by section 3(a), section 3(b) of Executive Order 12988
specifically requires that Executive agencies make every reasonable
effort to ensure that the regulation: (1) Clearly specifies the
preemptive effect, if any; (2) clearly specifies any effect on existing
Federal law or regulation; (3) provides a clear legal standard for
affected conduct while promoting simplification and burden reduction;
(4) specifies the retroactive effect, if any; (5) adequately defines
key terms; and (6)
[[Page 14875]]
addresses other important issues affecting clarity and general
draftsmanship under any guidelines issued by the Attorney General.
Section 3(c) of Executive Order 12988 requires Executive agencies to
review regulations in light of applicable standards in section 3(a) and
section 3(b) to determine whether they are met or it is unreasonable to
meet one or more of them. DOE has completed the required review and
determined that, to the extent permitted by law, this interim final
rule meets the relevant standards of Executive Order 12988.
C. Review Under the Regulatory Flexibility Act
This interim final rule has been reviewed under the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq., which requires preparation of an
initial regulatory flexibility analysis for any rule that is likely to
have significant economic impact on a substantial number of small
entities. This rule, which would implement provisions of Executive
Order 13101 concerning use of recycled materials, would not have a
significant economic impact on small entities. While rule requirements
may flow down to subcontractors in certain circumstances, the costs of
compliance are not estimated to be large and, in any event, would be
reimbursable expenses under the contract or subcontract.
Accordingly, DOE certifies that this rule would not have a
significant economic impact on a substantial number of small entities,
and, therefore, no regulatory flexibility analysis has been prepared.
D. Review Under the Paperwork Reduction Act
Information collection or record keeping requirements contained in
this rulemaking have been previously cleared under Office of Management
and Budget paperwork clearance package Number 1910-0300. There are no
new burdens imposed by this rule.
E. Review Under the National Environmental Policy Act
DOE has concluded that promulgation of this rule falls into a class
of actions which would not individually or cumulatively have
significant impact on the human environment, as determined by DOE's
regulations (10 CFR part 1021, subpart D) implementing the National
Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 et seq.).
Specifically, this rule is categorically excluded from NEPA review
because the amendments to the DEAR would be strictly procedural
(categorical exclusion A6). Therefore, this rule does not require an
environmental impact statement or environmental assessment pursuant to
NEPA.
F. Review Under Executive Order 13132
Executive Order 13132 (64 FR 43255, August 4, 1999) imposes certain
requirements on agencies formulating and implementing policies or
regulations that preempt State law or that have federalism
implications. Agencies are required to examine the constitutional and
statutory authority supporting any action that would limit the
policymaking discretion of the States and carefully assess the
necessity for such actions. DOE has examined today's rule and has
determined that it does not preempt State law and does not have a
substantial direct effect on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government. No further
action is required by Executive Order 13132.
G. Review Under the Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (Pub. L. 104-
4) requires each agency to assess the effects of Federal regulatory
action on State, local and tribal governments, and the private sector.
The Department has determined that today's regulatory action does not
impose a Federal mandate on State, local or tribal governments or on
the private sector.
H. Review Under the Treasury and General Government Appropriations Act,
1999
Section 654 of the Treasury and General Government Appropriations
Act, 1999 (Pub. L. 105-277), requires Federal agencies to issue a
Family Policymaking Assessment for any rule or policy that may affect
family well-being. This rulemaking will have no impact on family well-
being.
I. Review Under the Small Business Regulatory Enforcement Fairness Act
of 1996
As required by 5 U.S.C. 801, the Department of Energy will report
to Congress promulgation of this rule prior to its effective date. The
report will state that it has been determined that the rule is not a
"major rule" as defined by 5 U.S.C. 804(3).
J. Review Under Executive Order 13211
Executive Order 13211, Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use, (66 FR 28355,
May 22, 2001) requires Federal agencies to prepare and submit to the
Office of Information and Regulatory Affairs (OIRA), Office of
Management and Budget, a Statement of Energy Effects for any proposed
significant energy action. A "significant energy action" is defined
as any action by an agency that promulgates or is expected to lead to
promulgation of a final rule, and that: (1) Is a significant regulatory
action under Executive Order 12866, or any successor order; and (2) is
likely to have a significant adverse effect on the supply,
distribution, or use of energy, or (3) is designated by the
Administrator of OIRA as a significant energy action. For any proposed
significant energy action, the agency must give a detailed statement of
any adverse effects on energy supply, distribution, or use should the
proposal be implemented, and of reasonable alternatives to the action
and their expected benefits on energy supply, distribution, and use.
Today's rule is not a significant energy action. Accordingly, DOE
has not prepared a Statement of Energy Effects.
List of Subjects in 48 CFR Parts 904, 952 and 970
Government procurement.
Issued in Washington, DC, on March 19, 2002.
Spencer Abraham,
Secretary of Energy.
For the reasons set out in the preamble, Chapter 9 of Title 48 of
the Code of Federal Regulations is amended as set forth below.
1. The authority citation for parts 904 and 952 is revised to read
as follows:
Authority: 42 U.S.C. 7101 et seq.; 41 U.S.C. 418b; 50 U.S.C.
2401 et seq.
PART 904--ADMINISTRATIVE MATTERS
2. Section 904.401 is revised to read as follows:
904.401 Definitions.
Access Authorization means an administrative determination that an
individual is eligible for access to classified information or is
eligible for access to, or control over, special nuclear material.
Classified Information means information that is classified as
Restricted Data or Formerly Restricted Data under the Atomic Energy Act
of 1954, as amended, or information determined to require protection
against unauthorized disclosure under Executive Order 12958, or prior
Executive Orders, which is identified as National Security Information.
Facility Clearance means an administrative determination that a
[[Page 14876]]
facility is eligible to access, produce, use or store classified
information, or special nuclear material.
Restricted Data means all data concerning the design, manufacture,
or utilization of atomic weapons; the production of special nuclear
material; or the use of special nuclear material in the production of
energy, but does not include data declassified or removed from the
Restricted Data category pursuant to section 142 of the Atomic Energy
Act of 1954, as amended (42 U.S.C. 2162).
3. Section 904.402 is revised to read as follows:
904.402 General.
(a) The basis of DOE's industrial security requirements is the
Atomic Energy Act of 1954, as amended, and Executive Orders 12958 and
12829.
(b) DOE security regulations concerning restricted data are
codified at 10 CFR part 1045.
4. Section 904.404 is amended by revising the title and paragraph
(d)(1), revising the paragraph (d)(2) heading, revising the phrase
"included in DOE 1240.2 (see current version.), Attachment 3, and any
subsequent changes" to read "referenced in DOE N 142.1" in the
second sentence of paragraph (d)(3), and by adding (d)(5) to read as
follows:
904.404 Solicitation provision and contract clause. [DOE Coverage--
Paragraph (d)]
(d) * * *
(1) Security, 952.204-2. This clause is required in contracts and
subcontracts, the performance of which involves or is likely to involve
classified information. DOE utilizes the National Industrial Security
Program but DOE's security authority is derived from the Atomic Energy
Act which contains specific language not found in other agencies'
authorities. For this reason, DOE contracts must contain the clause at
952.204-2 rather than the clause at FAR 52.204-2.
(2) Classification/Declassification, 952.204-70 * * *
* * * * *
(5) Facility Clearance, 952.204-73. This solicitation provision
should be used in solicitations expected to result in contracts and
subcontracts that require employees to possess access authorizations.
904.70 [Amended]
5. Subpart 904.70 is amended by revising the title "Foreign
Ownership, Control, or Influence Over Contractors" to read "Facility
Clearance."
6. Section 904.7000 is revised to read as follows:
904.7000 Purpose.
This subpart sets forth the Department of Energy policies and
procedures regarding Facility Clearances for contractors and
subcontractors that require access to classified information or special
nuclear material. A Facility Clearance is based upon a determination
that satisfactory safeguards and security measures are carried out for
classified activities being performed at the facility and upon a
favorable foreign ownership, control, or influence (FOCI)
determination.
7. Section 904.7002 is amended by adding the definition of
"Facility Clearance" in alphabetical order to read as follows:
904.7002 Definitions.
* * * * *
Facility Clearance means an administrative determination that a
facility is eligible to access, produce, use, or store classified
information, or special nuclear material.
* * * * *
8. Section 904.7003 is amended by revising paragraphs (a) and (b)
as follows:
904.7003 Disclosure of foreign ownership, control, or influence.
(a) If a contract requires a contractor to have a Facility
Clearance, DOE must determine whether the contractor is or may be
subject to foreign ownership, control or influence before a contract
can be awarded.
(b) If, during the performance of a contract, the contractor comes
under FOCI, then the DOE must determine whether a continuation of the
Facility Clearance may pose an undue risk to the common defense and
security through the possible compromise of that information or
material. If the DOE determines that such a threat or potential threat
exists, the contracting officer shall consider the alternatives of
negotiating an acceptable method of isolating the foreign interest
which owns, controls, or influences the contractor or terminating the
contract.
* * * * *
904.7005 [Removed]
9. Section 904.7005, Solicitation provision and contract clause, is
removed.
904.7100 [Amended]
10. In Section 904.7100, remove the words "a company owned by"
and revise the word "company" following the words "for that" to
read "entity'.
11. Section 904.7102 is revised to read as follows:
904.7102 Waiver by the Secretary.
(a) 10 U.S.C. 2536(b)(1)(A) allows the Secretary of Energy to waive
the prohibition on the award of contracts set forth in 10 U.S.C.
2536(a) if the Secretary determines that a waiver is essential to the
national security interests of the United States. Any request for a
waiver regarding award of a contract or execution of a novation
agreement shall address:
(1) Identification of the proposed awardee and description of the
control by a foreign government;
(2) Description of the procurement and performance requirements;
(3) Description of why a waiver is essential to the national
security interests of the United States;
(4) The availability of other entities to perform the work; and
(5) A description of alternate means available to satisfy the
requirement.
(b) 10 U.S.C. 2536(b)(1)(B) allows the Secretary of Energy to waive
the prohibition on the award of contracts set forth in 10 U.S.C.
2536(a) for environmental restoration, remediation or waste management
contracts at a DOE facility if the Secretary determines that a waiver
will advance the environmental restoration, remediation or waste
management objectives of DOE; will not harm the national security
interests of the United States; and may be authorized because the
entity to which the contract is to be awarded is controlled by a
foreign government with which the Secretary is authorized to exchange
Restricted Data under Section 144.c. of the Atomic Energy Act of 1954
(42 U.S.C. 2164(c)). Any request for such a waiver regarding award of a
contract or execution of a novation agreement shall address:
(1) Identification of the proposed awardee and description of the
control by a foreign government;
(2) Description of the procurement and performance requirements;
(3) A description of how the Department's environmental
restoration, remediation, or waste management objectives will be
advanced;
(4) A description of why a waiver will not harm the national
security interests of the United States;
(5) The availability of other entities to perform the work;
(6) A description of alternate means available to satisfy the
requirement; and
(7) Evidence that the entity to which a contract is to be awarded
is controlled by a foreign government with which the Secretary is
authorized to exchange Restricted Data under Section 144.c. of the
Atomic Energy Act of 1954 (42 U.S.C. 2164(c)).
[[Page 14877]]
(c) Any request for a waiver under paragraph (a) or (b) of this
section shall be forwarded by the Head of the Contracting Activity to
the Office of Contract Management within the Headquarters procurement
organization.
(d) If the Secretary decides to grant a waiver for an environmental
restoration, remediation, or waste management contract, the Secretary
shall notify Congress of this decision. The contract may be awarded or
the novation agreement executed only after the end of the 45-day period
beginning on the date notification is received by the Senate Committee
on Armed Services and the House Committee on National Security.
(e) Any request for a waiver under this subpart shall be
accompanied by the information required by DEAR 952.204-73 that has
been developed by the Safeguards and Security Lead Responsible Office
at the contracting activity.
12. Section 904.7103, Solicitation provision and contract clause,
is amended by deleting the words "with its Alternate I" at the end of
paragraph (a) and by revising paragraph (b) to read as follows:
904.7103 Solicitation Provision and Contract Clause.
(a) * * *
(b) Any contract, including those awarded under simplified
acquisition procedures, under the national security program which
require access to proscribed information to enable performance, shall
include the clause at 48 CFR 952.204-2.
PART 952--SOLICITATION PROVISIONS AND CONTRACT CLAUSES
13. Section 952.204-2 is amended by revising the clause date and
paragraph (j) to read as follows:
952.204-2 Security Requirements.
* * * * *
Security (May 2002)
* * * * *
(j) Foreign Ownership, Control or Influence.
(1) The Contractor shall immediately provide the cognizant
security office written notice of any change in the extent and
nature of foreign ownership, control or influence over the
Contractor which would affect any answer to the questions presented
in the Certificate Pertaining to Foreign Interests, Standard Form
328 or the Foreign Ownership, Control or Influence questionnaire
executed by the Contractor prior to the award of this contract. In
addition, any notice of changes in ownership or control which are
required to be reported to the Securities and Exchange Commission,
the Federal Trade Commission, or the Department of Justice shall
also be furnished concurrently to the Contracting Officer.
(2) If a Contractor has changes involving foreign ownership,
control or influence, DOE must determine whether the changes will
pose an undue risk to the common defense and security. In making
this determination, DOE will consider proposals made by the
Contractor to avoid or mitigate foreign influences.
(3) If the cognizant security office at any time determines that
the Contractor is, or is potentially, subject to foreign ownership,
control or influence, the Contractor shall comply with such
instructions as the Contracting Officer shall provide in writing to
safeguard any classified information or special nuclear material.
(4) The Contractor agrees to insert terms that conform
substantially to the language of this clause, including this
paragraph, in all subcontracts under this contract that will require
subcontractor employees to possess access authorizations.
Additionally, the Contractor must require subcontractors to have an
existing DOD or DOE Facility Clearance or submit a completed
Certificate Pertaining to Foreign Interests, Standard Form 328,
required in DEAR 952.204-73 prior to award of a subcontract.
Information to be provided by a subcontractor pursuant to this
clause may be submitted directly to the Contracting Officer. For
purposes of this clause, subcontractor means any subcontractor at
any tier and the term "Contracting Officer" means the DOE
Contracting Officer. When this clause is included in a subcontract,
the term "Contractor" shall mean Subcontractor and the term
"contract" shall mean subcontract.
(5) The Contracting Officer may terminate this contract for
default either if the Contractor fails to meet obligations imposed
by this clause or if the Contractor creates a FOCI situation in
order to avoid performance or a termination for default. The
Contracting Officer may terminate this contract for convenience if
the Contractor becomes subject to FOCI and for reasons other than
avoidance of performance of the contract, cannot, or chooses not to,
avoid or mitigate the FOCI problem.
14. Section 952.204-73 is revised to read as follows:
952.204-73 Facility Clearance.
As prescribed in 904.404(d)(5), insert the following provision in
all solicitations which require the use of Standard Form 328,
Certificate Pertaining to Foreign Interests for contracts or
subcontracts subject to the provisions of 904.70.
Facility Clearance (May 2002)
Notices
Section 2536 of title 10, United States Code, prohibits the
award of a contract under a national security program to an entity
controlled by a foreign government if it is necessary for that
entity to be given access to information in a proscribed category of
information in order to perform the contract unless a waiver is
granted by the Secretary of Energy. In addition, a Facility
Clearance and foreign ownership, control and influence (FOCI)
information are required when the contract or subcontract to be
awarded is expected to require employees to have access
authorizations.
Offerors who have either a Department of Defense or a Department
of Energy Facility Clearance generally need not resubmit the
following foreign ownership information unless specifically
requested to do so. Instead, provide your DOE Facility Clearance
code or your DOD assigned commercial and government entity (CAGE)
code. If uncertain, consult the office which issued this
solicitation.
(a) Use of Certificate Pertaining to Foreign Interests, Standard
Form 328.
(1) The contract work anticipated by this solicitation will
require access to classified information or special nuclear
material. Such access will require a Facility Clearance for the
Contractor organization and access authorizations (security
clearances) for Contractor personnel working with the classified
information or special nuclear material. To obtain a Facility
Clearance the offeror must submit a Certificate Pertaining to
Foreign Interests, Standard Form 328, and all required supporting
documents to form a complete Foreign Ownership, Control or Influence
(FOCI) Package.
(2) Information submitted by the offeror in response to the
Standard Form 328 will be used solely for the purposes of evaluating
foreign ownership, control or influence and will be treated by DOE,
to the extent permitted by law, as business or financial information
submitted in confidence.
(3) Following submission of a Standard Form 328 and prior to
contract award, the Contractor shall immediately submit to the
Contracting Officer written notification of any changes in the
extent and nature of FOCI which could affect the offeror's answers
to the questions in Standard Form 328. Following award of a
contract, the Contractor must immediately submit to the cognizant
security office written notification of any changes in the extent
and nature of FOCI which could affect the offeror's answers to the
questions in Standard Form 328. Notice of changes in ownership or
control which are required to be reported to the Securities and
Exchange Commission, the Federal Trade Commission, or the Department
of Justice must also be furnished concurrently to the cognizant
security office.
(b) Definitions.
(1) Foreign Interest means any of the following:
(i) A foreign government, foreign government agency, or
representative of a foreign government;
(ii) Any form of business enterprise or legal entity organized,
chartered or incorporated under the laws of any country other than
the United States or its possessions and trust territories; and
(iii) Any person who is not a citizen or national of the United
States.
(2) Foreign Ownership, Control, or Influence (FOCI) means the
situation where the degree of ownership, control, or influence over
a Contractor by a foreign interest is such
[[Page 14878]]
that a reasonable basis exists for concluding that compromise of
classified information or special nuclear material may result.
(c) Facility Clearance means an administrative determination
that a facility is eligible to access, produce, use or store
classified information, or special nuclear material. A Facility
Clearance is based upon a determination that satisfactory safeguards
and security measures are carried out for the activities being
performed at the facility. It is DOE policy that all Contractors or
Subcontractors requiring access authorizations be processed for a
Facility Clearance at the level appropriate to the activities being
performed under the contract. Approval for a Facility Clearance
shall be based upon:
(1) A favorable foreign ownership, control, or influence (FOCI)
determination based upon the Contractor's response to the ten
questions in Standard Form 328 and any required, supporting data
provided by the Contractor;
(2) A contract or proposed contract containing the appropriate
security clauses;
(3) Approved safeguards and security plans which describe
protective measures appropriate to the activities being performed at
the facility;
(4) An established Reporting Identification Symbol code for the
Nuclear Materials Management and Safeguards Reporting System if
access to nuclear materials is involved;
(5) A survey conducted no more than 6 months before the Facility
Clearance date, with a composite facility rating of satisfactory, if
the facility is to possess classified matter or special nuclear
material at its location;
(6) Appointment of a Facility Security Officer, who must possess
or be in the process of obtaining an access authorization equivalent
to the Facility Clearance; and, if applicable, appointment of a
Materials Control and Accountability Representative; and
(7) Access authorizations for key management personnel who will
be determined on a case-by-case basis, and must possess or be in the
process of obtaining access authorizations equivalent to the level
of the Facility Clearance.
(d) A Facility Clearance is required prior to the award of a
contract requiring access to classified information and the granting
of any access authorizations under a contract. Prior to award of a
contract, the DOE must determine that award of the contract to the
offeror will not pose an undue risk to the common defense and
security as a result of its access to classified information or
special nuclear material in the performance of the contract. The
Contracting Officer may require the offeror to submit such
additional information as deemed pertinent to this determination.
(e) A Facility Clearance is required even for contracts that do
not require the Contractor's corporate offices to receive, process,
reproduce, store, transmit, or handle classified information or
special nuclear material, but which require DOE access
authorizations for the Contractor's employees to perform work at a
DOE location. This type facility is identified as a non-possessing
facility.
(f) Except as otherwise authorized in writing by the Contracting
Officer, the provisions of any resulting contract must require that
the contractor insert provisions similar to the foregoing in all
subcontracts and purchase orders. Any Subcontractors requiring
access authorizations for access to classified information or
special nuclear material shall be directed to provide responses to
the questions in Standard Form 328, Certificate Pertaining to
Foreign Interests, directly to the prime contractor or the
Contracting Officer for the prime contract.
Notice to Offerors--Contents Review (Please Review Before Submitting)
Prior to submitting the Standard Form 328, required by paragraph
(a)(1) of this clause, the offeror should review the FOCI submission
to ensure that:
(1) The Standard Form 328 has been signed and dated by an
authorized official of the company;
(2) If publicly owned, the Contractor's most recent annual
report, and its most recent proxy statement for its annual meeting
of stockholders have been attached; or, if privately owned, the
audited, consolidated financial information for the most recently
closed accounting year has been attached;
(3) A copy of the company's articles of incorporation and an
attested copy of the company's by-laws, or similar documents filed
for the company's existence and management, and all amendments to
those documents;
(4) A list identifying the organization's owners, officers,
directors, and executive personnel, including their names, social
security numbers, citizenship, titles of all positions they hold
within the organization, and what clearances, if any, they possess
or are in the process of obtaining, and identification of the
government agency(ies) that granted or will be granting those
clearances; and
(5) A summary FOCI data sheet.
Note: A FOCI submission must be attached for each tier parent
organization (i.e. ultimate parent and any intervening levels of
ownership). If any of these documents are missing, award of the
contract cannot be completed.
952.204-74 [Removed]
15. Section 952.204-74 is removed.
16. The authority citation for Part 970 continues to read as
follows:
Authority: 42 U.S.C. 2201; 42 U.S.C. 7101 et seq.; 50 U.S.C.
2401 et seq.
PART 970--DOE MANAGEMENT AND OPERATING CONTRACTS
17. Section 970.0404-1, Definitions, is amended by adding, in
alphabetical order, definitions for "Access Authorization" and
"Facility Clearance" and revising the definition of "Restricted
Data" to read as follows:
970.0404-1 Definitions.
Access Authorization means an administrative determination that an
individual is eligible for access to classified information or is
eligible for access to, or control over, special nuclear material.
* * * * *
Facility Clearance means an administrative determination that a
facility is eligible to access, produce, use or store classified
information or special nuclear material.
Restricted Data means all data concerning design, manufacture, or
utilization of atomic weapons; the production of special nuclear
material; or the use of special nuclear material in the production of
energy; but shall not include data declassified or removed from the
Restricted Data category pursuant to section 142 of the Atomic Energy
Act of 1954, as amended, (42 U.S.C. 2162).
18. Section 970.0404-2, General, is revised to read as follows:
970.0404-2 General.
(a) Guidance regarding the National Industrial Security Program as
implemented by the Department of Energy may be found at 904.4,
Safeguarding Classified Information Within Industry. Additional
information concerning contractor ownership when national security or
atomic energy information is involved may be found at 904.70.
Information regarding contractor ownership involving national security
program contracts may be found at 904.71.
(b) Executive Order 12333, United States Intelligence Activities,
provides for the organization and control of United States foreign
intelligence and counterintelligence activities. DOE has established a
counterintelligence program subject to this Executive Order which is
described in DOE Order 5670.3 (as amended). All DOE elements, including
management and operating contractors and other contractors managing
DOE-owned facilities which require access authorizations, should
undertake the necessary precautions to ensure that DOE and covered
Contractor personnel, programs and resources are properly protected
from foreign intelligence threats and activities.
19. Section 970.0404-3, Responsibilities of contracting officers,
is amended by removing paragraph (a) and redesignating paragraphs (b)
and (c) as paragraphs (a) and (b).
[FR Doc. 02-7298 Filed 3-27-02; 8:45 am]
BILLING CODE 6450-01-P